Sunday, 15 May 2011

Practice: Schutz (UK) Ltd and Another v Delta Containers Ltd and Another

On 2 April I wrote a case note on Schutz (UK) Ltd. v Werit (UK) Ltd [2011] EWCA (Civ) 303 (29 March 2011) in my IP/IT Update blog. That case was about whether a patent for an intermediate bulk carrier - essentially a large plastic bottle tightly encased in a tight metal cage constructed from tubes flattened at each join - could be infringed by inserting the bottle into a cage constructed from differently connected members. The defendants in Schutz (UK) Ltd and Another v Delta Containers Ltd. and Another [2011] EWHC (Pat) 1173 (5 May 2011) were engaged in very much the same activity.

Schutz (UK) Ltd. and its holding company ("Schutz") brought proceedings for patent and trade mark infringement and passing off against both Werit (UK) Ltd ("Werit") and Delta Containers Ltd. ("Delta") and the actions were to be heard in tandem. On the 23 January 2009, however, Delta agreed to be bound by the judgment in the patent action against Werit and offered to remove or obliterate Schutz's trade mark from the cages in which other suppliers' bottles were placed. In those circumstances, Mr. Justice Kitchin agreed in January 2009 to adjourn the trial of the trade mark and passing off claims until 13 June 2011 when Schutz's patent infringement claim against Werit should have been determined.

As I noted in my case note, the claim failed at first instance but Schutz appealed successfully to the Court of Appeal. Werit has applied for permission to appeal to the Supreme Court and it has indicated that it will apply to the Supreme Court if the Court of Appeal refuses its application. As that application will not be heard until after 13 June 2011 Delta applied to Mr. Justice Kitchin adjourn the trade mark and passing off trial until after Werit's application and any subsequent appeal to the Supreme Court is determined. I have written about this application in this blog rather than IP/IT Update because Delta's solicitors were Clough & Willis of Bury.

Mr. Justice Kitchin dismissed Delta's application on the grounds that it would not be possible to fix a trial of the passing off and trade mark infringement action until October 2011 at the earliest or indeed until January 2013 if the Supreme Court heard Werit's appeal. As there might be a year's delay between fixing the date for trial and the trial itself that would mean that the action would be heard between 4 1/2 and 5 1/2 years after the issue of proceedings. Furthermore, any appeal in the Werit proceedings would not be dispositive of the trade mark infringement and passing off claims as Delta was not prepared to submit to judgment in the trade mark and passing off action if the patent infringement case were to be decided ultimately in Schutz's favour.

In the judge's view, delaying the trade mark and passing off trial until October 2012 or even 2014 would prejudice Schutz in the following respects. First, it would be harder to prosecute the action since at least one of the witnesses might disappear and the recollections of the others might fade. Secondly, the patent itself would expire in 2016 and with it any injunction that Schutz may ultimately obtain in the proceedings against Werit. Thirdly, the scope of the injunction offered by Delta was considerably narrower than that sought in the passing off and trade mark proceedings. Conversely, the only prejudice that Delta would suffer would be the expense of defending the action sooner rather than later.

The other point worth noting is the argument over costs. Schutz, which were represented by SNR Denton, claimed £21,000. Delta's costs, had it been successful, would have been £7,028. Delta submitted that the Schutz's costs were excessive and disproportionate even allowing for the additional work for the party with the carriage of the action and the differences in rates between City and Lancashire rates. The judge agreed that Schutz's costs were unduly high. He was particularly surprised at the presence of not less than 3 solicitors on the claimant's side in court. He assessed their costs at £15,000.

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